Anyone that has been in this business for an extended period of time knows just how diffucult it is to be successful in manufacturing. It is just plain hard work coupled with long hours and ongoing challenges. The money you earn does not often come easy. Therefore, you must do everything in your power to insure payment for completed work. Most business owners (and businesses for that matter), are honest and pay their bills on time when possible. Sometimes, customers get into a financial pinch, drag their feet and pay late. Other times it is a company's policy to pay in 45, 60 or 90 days. If the customer is paying late, it is YOUR job to determine whether or not you should continue to do business with them.

"NEVER" is the word that warrants serious concern in the phrase "Better Late Than Never" and this is what I will be talking about in this segment. The relationships you develop with your customers are always unique. They may range in duration from 30 minutes to 30 years. From a handshake to a 30 page contract. All business relationships, however, have one thing in common, each party (supposedly) has something the other party wants. Difficulties usually arise when one or the other doesn't deliver on their obligations. If you are experiencing a problem with payment for your goods or services (assuming that you have held up your end of the deal, GOOD WORK - ON TIME), you must decide a course of action. Most times, a simple phone call to a long time customer is all it takes. On the other hand, newer customers usually require closer attention. They should be well aware of the fact that timely payment is a critical part of your relationship. When dealing with new customers I always try to get payment upon delivery. This is not always possible but should be a tool at your disposal when a prospective customer comes thru your door.

When you receive your first payment from a new customer, make a photo copy of the check and keep it in a safe place for future reference. This check will have the sequence number and account number on it. The only time you should ever need their account number is if there is a problem in the future with any type of payment. I will give you an example: A new customer gives you a small job and pays on delivery by check. You make a photo copy of the check and deposit the check in your account. Your account is credited with the amount on the check and everyone is happy. Sometime in the future the customer returns with a much larger job, wanting terms of Net 30. You agree to his terms, run the job and deliver it on time. Thirty five days go by and you have not received payment. You call the customer to find out what is going on. The customer says times are tight, I'll pay you Net 60. This is a BIG red flag and should be a sign for you to make a personal visit to their facility, primarily to get a better understanding of who they are, what kind of an operation they are running and if possible why they are experiencing financial difficulties. If you get a bad feeling after your visit or if you cannot arrange a visit, begin double checking their credit references, contact other machine shops that are doing business with them, finding out everything you can. If things are looking glum, it is time to take a look at their bank account to see if your new customer is on the "up and up" with you. I only recommend this if it appears as though you are not going to get paid. Contact their bank to determine the amount of funds that are available in their account. If their account is flush with cash and the customer won't give you a full and satisfactory explanation for non payment, I recommend seeking legal counsel or small claims court when the bill is 35 days PAST the due date.

What to do with a check that does not clear your bank.
If you have a customer's check returned to you for Non-sufficient funds (NSF), contact the customer and use everything at your disposal to determine whether or not the customer wrote you a bad check on purpose. Most times the case will be an accounting error or some other honest mistake on the customer's behalf. If, however, you have determined after extensive research that this is truly the "Polecat" that everyone has warned you about, it may be time to get whatever you can out of their account even if it is pennies on the dollar. I have never done this myself, but a few people I know have done this. I have checked with several bankers in the state of Colorado to make sure that the following procedure can be done and that it is legal. Let your conscience be your guide when determining whether or not it is worth it. With the check in hand, call their bank and tell them you have a check for X amount of dollars and you would like to know how much money is needed to be deposited in order to make the check clear. This will be your choice and I reccommend discussing it with an account representative at their bank to make absolutely sure that their bank will allow this. Once you make the decision to follow thru with this course of action, all you need to do is take the check to the bank with enough cash to clear the check and deposit the cash in their account, then have a cashier's check made out on the spot to your company. Always double check with the teller at the bank to make sure that nothing has changed with the account since you first spoke with the account representative.

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